Last week, the Public Utility Commission (PUC) sustained the $11 million fine it imposed against ride-sharing service Uber, voting 4-1 to deny reconsideration of its May 2016 order imposing this penalty against Uber for its unprecedented number of violations of PUC regulations, including operating without PUC authority via a certificate of public convenience.
HMS Legal Blog
On August 11, 2016, The PUC acting pursuant to Act 85 of 2016, which requires the PUC to promulgate new regulations in response to changes in the industry, requested public comment on ride sharing companies such as Uber and Lyft. Uber and Lyft have spurred and created controversy in both the Public Utility Commission (PUC) and Commonwealth Courts. The PUC requested comments include “specific suggestions for any proposal, including suggested regulatory language, with appropriate citations to current regulations that address the particular comment. Additionally, comments must provide the underlying rationale to support any suggested temporary regulations.” Comments are due 30 days from publication in the Pennsylvania Bulletin, which is published each Saturday. The rulemaking is docketed at L-2016-2556432.
On August 1, 2016, The Pennsylvania Department of Environmental Protection (DEP) released its 2015 Oil and Gas Annual Report (Report). In additional to natural gas production details, the Report provides information on natural gas data trends in Pennsylvania and details on DEP inspections. 2015 was a difficult year for the natural gas industry as it faced record inventory levels, declining prices, and decreases in newly drilled wells. DEP confirms Pennsylvania was not immune to the national downturn in natural gas drilling with only 1,070 newly drilled wells in 2015 – more than a 50% decrease from the 2,163 new wells drilled in 2014.
On June 30, 2016, at its most recent public meeting, the Pennsylvania Public Utility Commission (“Commission”) set a precedent important to Pennsylvania Uber (operating in Pennsylvania under its subsidiary Raiser-PA) and Lyft users alike by granting Yellow Cab Company of Pittsburgh, Inc. (“Yellow Cab”), a temporary extension of one year of operating authority to provide Transportation Network Service (“TNC”) in Pennsylvania. Although Yellow Cab may no longer be a household name like Uber and Lyft, the service that it provides is identical. In fact, Yellow Cab was the first Transportation Network Service (“TNC”) or app-based transportation provider that was granted temporary authority to operate in Pennsylvania. But under the Commission’s regulations, TNC authority is considered “experimental” and therefore is temporary and only valid for two years. Yellow Cab was granted authority to operate beginning in July 2014 and without the Commission’s June 30th Order, it would have been required to cease operating on July 1, 2016.
When Pennsylvania’s Independent Regulatory Review Commission (“IRRC”) voted unanimously at its June 30, 2016 meeting to disapprove for a second time the Pennsylvania Public Utility Commission’s (“PUC”) recent efforts to modify its regulations implementing the Alternative Energy Portfolio Standards(“AEPS”) Act, it was aware that its action would at most place a speed bump in the PUC’s path, but it disapproved the regulations anyway.
On June 29, 2016, President Obama, Prime Minister Trudeau, and President Nieto announced the North American Climate, Clean Energy, and Environment Partnership at the North American Leaders Summit. According to President Obama, the “ambitious and enduring” Partnership will see the United States, Canada, and Mexico “work toward the common goal of a North America that is competitive, that encourages clean growth, and that protects our shared environment.”
Yesterday, President Obama signed into law the “Protecting our Infrastructure of Pipelines and Enhancing Safety” (PIPES) Act. This bi-partisan bill was the culmination of efforts by both the Energy and Commerce Committee and the Transportation and Infrastructure Committee. This Act is intended to increase the efficiency and transparency of the Pipeline and Hazardous Materials Safety Administration (PHMSA) while enlarging safety inspections and audits of the natural gas pipeline industry.
On June 2, 2016 the Independent Regulatory Review Commission (“IRRC”) appropriately voted 5-0 to disapprove the Pennsylvania Public Utility Commission’s (“PUC”) attempt to modify its regulations implementing the Alternative Energy Portfolio Standards (“AEPS”) Act, 73 P.S. §§1648.1, et seq. The IRRC’s rejection was based primarily on its view that the PUC’s proposed regulations would exceed its statutory authority by limiting net-metering of electricity to entities with alternative energy systems sized to generate no more than 200% of their annual consumption. The IRRC went on to state that if the PUC decides to proceed with the rulemaking by deleting this limit, it “should ensure that other provisions of the regulation do not limit a customer-generator’s ability to net-meter excess generation it produces.” The IRRC also found that the PUC had failed to show any need for the modifications and suggested that because the PUC’s proposal appeared to be a change in policy of such a substantial nature consultation with the General Assembly was warranted.
Tuesday night, the U.S. Senate passed the Protecting our Infrastructure of Pipelines and Enhancing Safety Act (PIPES Act). This bill is now headed to President Obama to be signed into law. In addition to reauthorizing the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) through FY2019, this soon-to-be law enacts substantive changes in the pipeline industry’s regulatory landscape.
Uber Week for Uber in PA - Commonwealth Court Affirms PUC’s Authorization of Raiser’s Service (an Uber Subsidiary) and PUC Decreases Recommended $49 Mil Civil Penalty to $11 Mil
In an April 19, 2016 Opinion, the Pennsylvania Commonwealth Court affirmed the Public Utility Commission’s (PUC) grant of a certificate of public convenience (CPC) for experimental authority to operate as a common carrier to Raiser-PA, LLC (Raiser) in Pennsylvania, excluding Philadelphia. Raiser is a subsidiary of Uber Technologies, Inc. (Uber), which licenses the technology to Raiser that allows users to request a ride via smartphone app.
On March 17, 2016 Pipeline and Hazardous Materials Safety Administration (PHMSA) released a 549 page Notice of Proposed Rulemaking (NPRM) that significantly changes regulations for transmission lines and imposes regulations on previously unregulated gathering lines carrying, inter alia, natural gas and petroleum products.
The Pennsylvania Public Utility Commission (PUC) recently issued a final rule making order concerning recovery of fuel costs by gas utilities at Docket No. L-2013-2346923. The full order can be found here: http://www.pabulletin.com/secure/data/vol46/46-4/110.html The Order is designed to simplify and streamline information and procedures for small gas utilities (gross intrastate operating revenues of $40 million or less) when submitting gas cost rate (GCR) filings with the PUC.
On February 18, 2016, EPA Announced its Triennial National Enforcement Initiatives (“Initiatives”). The EPA issues these Initiatives once every three years in order to help “focus time and resources on national pollution problems” according to Cynthia Giles, assistant administrator for enforcement and compliance assurance at EPA. The latest round of Initiatives will begin on October 1, 2016 and once again will list natural gas producers and water authorities as targets for EPA inspections and enforcement.
U.S. Supreme Court weighs in on line between FERC and States when it comes to demand response programs.
Yesterday the U.S. Supreme Court in a majority decision reversed the D.C. Circuit Court of Appeals’ decision and determined that a regional transmission organization’s (RTO) demand response program compensation comes under FERC’s jurisdiction. A demand response program is when, during high electricity demand, customers of electricity are paid not to use electricity. These demand response programs serve to lower electricity prices and increase the reliability of the electric grid. Center to the present issue is FERC’s issuance of Order No. 745 (Order 745). Order 745 requires market operators to pay the same price to demand response providers for conserving energy as to the generators for making energy. The D.C. Circuit Court held that FERC lacked authority to issue the order because Order 745 would directly regulate retail electricity rates. The D.C. Circuit Court also held that FERC’s demand response compensation scheme was arbitrary and capricious under the Administrative Procedure Act. The U.S. Supreme Court disagreed.
In a binding poll of the issues taken at its September 17, 2015 Public Meeting, the Pennsylvania Public Utility Commission (“PUC”) unanimously voted in support of the Natural Gas Supplier Parties’ (“NGS Parties”) request to modify the way Columbia Gas of Pennsylvania (“Columbia”) refunds back to customers’ their share of off-system sales revenue.
Almost one year to the day from its 2014 rate increase filing, Columbia Gas of Pennsylvania is back before the Pennsylvania Public Utility Commission seeking an additional $46 million in revenue.
Despite high demand due to persistent cold weather, heating oil and propane will continue to flow to Pennsylvania homes due in part to the extension of the drivers’ hours-of-operation exemption issued by the Governor’s Office.
The Commonwealth Court Strikes a Delicate Balance Between Environmental Protection, Economic Development, and Deference to the Legislative Branch.
In Pennsylvania Environmental Defense Foundation v. Com., -- A.3d – (2015), the Commonwealth Court issued a decision that balanced statutory and constitutional environmental protections against economic development and deference to collateral branches of government. Specifically, in a 6-1 decision, the Court held that legislation authorizing revenue contributions to the General Assembly’s annual appropriations fund (“General Fund”) from a fund financed by oil and natural gas leases on public lands (“Lease Fund”) executed between the Department of Conservation and Natural Resources (“DCNR”)and various private parties does not violate Article I, Section 27 of the Pennsylvania Constitution (the “Environmental Rights Amendment”).
“Tip Letter” and Records Related to Investigation Leading to PUC-Approved Settlement Not Subject to Disclosure
The PUC is not required to disclose a utility employee’s “tip letter” or other records relating to an investigation of the utility’s practices where the documents are not considered by the Commissioners when approving the resulting settlement.
In a 5-2 en banc opinion issued December 22, the Commonwealth Court flatly rejected the notion that a utility must prove “absolute necessity” before resorting to condemnation. Affirming the PUC’s grant of PPL Electric’s application to exercise its eminent domain power to acquire rights-of-way and easements over the private lands of protestants to construct a new eleven-mile transmission line across the Susquehanna River and a related substation, the Court reaffirmed prior case law adopting an easier hurdle for would-be utility condemnors. As the Court reasoned: “Under Protestants’ proposed standard, utilities could only seek approval … when a problem is looming and the resolution is ‘absolutely necessary.’ Utilities would essentially have to wait until an existing system fails before seeking approval of a project. Not only would this approach be impractical and unrealistic, it would actually pose a danger to the health, safety and welfare of the public.” Hess v. Pennsylvania Public Utility Commission, 1370 C.D. 2013 (December 22, 2014) (en banc).